BUILDING TRUST IN A CONNECTED WORLD – HAYNNE’S ROYAL COMMISSION

1. BUILDING TRUST IN A CONNECTED
WORLD – HAYNNE’S ROYAL COMMISSION
Prof. Godwin Emmanuel, Oyedokun
HND (Acct.), BSc. (Acct. Ed), BSc (Acc & Fin), MBA (Acct. & Fin.), MSc. (Acct.), MSc. (Bus &
Econs.), MTP (SA), PhD (Acct), PhD (Fin), FCA, FCTI, ACIB, ACS, MNIM, CNA, FCFIP, FCE,
FERP, CICA, CFA, CFE, CIPFA, CPFA, ABR, CertIFR, FFAR
godwinoye@yahoo.com
+2348033737184, +2348055863944 & 08095491026
Principal Partner, Oyedokun Godwin Emmanuel & Co
(Chartered Accountants)
Chief Technical Consultant/President, OGE Professional
Services
Being Paper presented at the 14th ICAN Western Zonal Accountants’
Conference
Held from February 3rd to 6th, 2020 at Yewa Frontier Hotel, Ilaro, Ogun State.

2. Protocol and Appreciation
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3. CONTENTS
This Presentation Will Cover The Followings Among Other :
 Introduction
 The Concept of Trust
 Reasons for Trust
 Qualities that Safeguard Trust
 Business-To-Business (B2b) Trust
 Connected World
 Social Capital
 Popular Social Media Platforms
 Benefits of Social Media for Business Growth
 Hayne Royal Commission
 Haynes Royal Commission and Financial Services Industry
and Regulators
 Conclusion and Recommendation

4. INTRODUCTION
 Haynne’s Royal Commission:
 established in 2017
 by the Australian government
 pursuant to the Royal Commission act of 1902.
 to prevent entities from collapse due to:
 misconduct,
 mistrusts and
 violation of corporate governance.
 society can only thrive when there is high level of trust
among various parties to a transaction, respect to rule of
law and simple agreement.
 Trust is a component of ease of doing business around the
world.
 Business promoters, investors and professionals value trust
and place it as one of the most important asset for any
business to grow.

5. INTRODUCTION (CONT.)
Professional accountants and trust
 show positive attitude which is similar to
our tenet Integrity.
Organization may collapse due to
mistrusts of management to other
stakeholders.
Corporate governance is to formalise
trust and avoid incidence of imminent
collapse.

6. • In this lecture,
• we will examine the impact of Trust on the survival of an
enterprise, and
• even the nation at large with professional accountants
leading the campaign for Trust in all our dealings.

7. THE CONCEPT OF TRUST
 Trust:
 foundation of any healthy relationship.
 one party relies on another to behave in a certain way.
 elements of trust in a relationship:
 risk (based on uncertainty about how the other party will
behave), and
 interdependence (a reliance on the other party to fulfill
their part of the arrangement).
 Trust is violated when there is a deviation from what
is expected.
 When trust is violated, expectations of future behavior
are changed and trust declines.

8. THE CONCEPT OF TRUST (CON’T)
Benefits of being trusted
 vital to success in business
 lower employee turnover
 higher revenue
 higher profitability
 higher shareholder returns
 lower costs of doing business
 fosters cooperation among professional colleagues
 increases commitment to the organisation
 improves social capital
 competitive advantage

9. What is in Trust?

10. NATURE OF TRUST
Fundamental building blocks:
Competency Integrity Goodwill
Effective
Communicati
on

11. MEGATRENDS RELEVANT TO TRUST
 Megatrends are:
 significant, transformative trends that help define the
present and shape the future.
 These affect:
 business,
 the economy,
 industry,
 society and
 individuals including Professional Accountants.
 These three megatrends illustrate a range of factors that impact on
trust such as:
Technological
change
Data and
information
Industrial
change

12. TRUST IN PROFESSIONS
 Trust evolves.
 Religious institutions were the most trusted
 Over time, trust moved to other institutions
 When it comes to business, certain professions are
trusted more than others.
 Nurses,
 Doctors; and
 teachers typically score highly.
 Conversely, other occupations, such as:
 real estate agents; and
 insurance brokers, score poorly in equivalent trust
rankings.
 What is the position of Professional Accountants in
this ranking?

14. TRUST AND CULTURE IN DEVELOPING NETWORKS
Trust influences how parties in social
exchange relationship behave and
reason.
If the trust is low, parties of
relationship need more information.
As long as they get the information
trust increases (Tomkins, 2001).

15. TRUST EVALUATION MODEL

16. QUALITIES THAT SAFEGUARD TRUST
Below are twelve (12) major qualities that safeguard trust:
 Competency: Others can be confident you have the skills and
experience to fulfil your part of the contract.
 Integrity: Others believe that you are honest and will keep your
word.
 Goodwill: Others have confidence you will look after their
interests.
 Accountability: Prompt and effective communication is crucial.
A simple call or email to communicate matters to clients can go a
long way towards improving trust.
 Consistency: Look for ways to improve consistency around the
services you offer.
 Honesty: Unsurprisingly, survey participants said the most
important quality affecting how much they trusted their
accountant was honesty.

17. QUALITIES THAT SAFEGUARD TRUST (CON’T)
 Data literacy: Protect private data held by your
business and share a clear policy.
 Transparency: Be clear about where you sit on
certain issues and behave ethically at all times.
 Quality: Make sure you provide a high-quality
service and offer value for money.
 Caring: Demonstrate that society or customers are
above all else to your business.
 Humanity: It’s important to maintain relationships
with clients that extend beyond technology.
 Openness to change: Look for ways to do things
better and embrace change within your business.

18. CONNECTED WORLD
 Consumers and businesses want to be connected
everywhere and anywhere - at home, in the street, in
their cars, on transportation and underground.
 We expect these connections to be fast and as
networks deliver this speed, we want it faster still.
 Once again, technology is struggling to meet demand.
 There is no doubt that the Internet of Things (IoT)
is here.
 Consumer and business demand for more connected
devices and greater bandwidth is driving an
explosion in the networked world.

19. CONNECTED WORLD
 It’s not just new ‘things’ that are being connected, but existing devices
that are being combined and re-combined in multiple ways.
 Juniper Research estimates that 38.5 billion units will be hooked up to
the Internet of Things (IoT) by 2020 as the number of connected devices
across the world triples over the next few years
 However, the connected world will not truly arrive until the
infrastructure and networks supporting it are proven.

20. SOCIAL CAPITAL
 Social capital is the effective functioning of social groups
through interpersonal relationships, a shared sense of
identity, a shared understanding, shared norms, shared
values, trust, cooperation, and reciprocity.
 Social capital is about the value of social networks, bonding
similar people and bridging between diverse people, with
norms of reciprocity (Dekker & Uslaner 2001; Uslaner
2001).
 Social Capital is referred to as the people you know; the
people who know you and how they know you. People think
or behave like social capital is only needed on weddings
and burials, which is quite unfortunate.

21. SOCIAL CAPITAL (CONT.)
 Social capital is not built overnight; it is reciprocal and
does not need money (especially in this virtually
connected world) to build.
 A popular quote:
 Respecting everyone no matter their status in life and being
there when others need you is most important. Be a solution,
an encouragement and inspiration. Avoid being a leech, a
user or nagger. Just be a nice person who in a calculated
way stays in touch with people and brings joy,
encouragement and hope. The most important asset we have
in life is not your job, money or title; its people. Your
network is your net worth! (Adapted from WhatsApp group
from Prof. M.A. Mainoma)
The connected world has never looked more
exciting.

22. SOCIAL MEDIA AND BUILDING CONNECTIONS
 Social media is defined as highly interactive platforms which
allow its users to interact with each other and with content.
 It is a tool for communication, sharing and creating content, as
well as a technology which allows users to have an online
presence (Meikle, 2016).

 Statistics show that in July 2016, approximately 1.13 billion
people use social media on a daily basis (Larosiliere, 2016).
 One of the most common forms of social media is social
networking sites.
 Some of the early versions of these social networking sites
included MySpace and the early version of Facebook. Today,
some of the most popular social media platforms include:

23. 2
3
POPULAR SOCIAL MEDIA PLATFORMS
LinkedIn
Facebook
Twitter
Instagram
Snapchat
Reddit
WhatsApp
Tinder
Google+

24. BENEFITS OF SOCIAL MEDIA FOR BUSINESS
GROWTH
 Increase brand awareness
 Humanize your brand
 Establish your brand as a thought leader
 Stay top of mind
 Increase website traffic
 Generate leads
 Boost sales
 Partner with influencers
 Promote content
 Go viral

25. 2
5
HAYNE ROYAL COMMISSION
 The Royal Commission into Misconduct in the Banking,
Superannuation and Financial Services Industry, also known as
the Banking Royal Commission and the Hayne Royal
Commission, was a royal commission established on 14 December
2017 by the Australian government pursuant to the Royal
Commissions Act 1902 to inquire into and report on misconduct
in the banking, superannuation, and financial services industry.

 A Royal Commission is formally established by the Governor-
General on behalf of the Crown and on the advice of Government
ministers.
 The government decides the terms of reference, provides the
funding and appoints the commissioners, who are selected on the
basis of their independence and qualifications.
 They are never serving politicians.

26. THE HONORABLE KENNETH
MADISON HAYNE AC QC
The Honorable Justice
Kenneth Madison Hayne
AC QC served as the sole
commissioner and
submitted an interim
report to the Governor-
General of Australia on
28 September 2018,
which was tabled in
parliament by the
Government on the same
day.

28. HAYNE ROYAL COMMISSION
 Royal Commissions may be called by the federal
government alone, or by the federal government and
a state government.
 Or just by a state government.
 Royal Commissions usually fit two categories: those
that are primarily investigative, seeking to uncover
the truth about something, and those that are
advisory, seeking to assist the formulation of
government policy.
 Royal Commissions allow for input from the public
through written submissions and presentation at
hearings.

29. HAYNE ROYAL COMMISSION
 They are not judicial; they bring down no verdicts.
But they can refer matters to the police.
 They can summon and cross-examine witnesses
under oath and can offer indemnity to individuals
who cooperate.
 They travel to capital cities, regional Centre’s and
towns to hear evidence and pursue open processes,
though evidence may be given in a closed hearing in
certain circumstances.

30. HAYNE ROYAL COMMISSION
 However, they also have very wide-ranging coercive
information-gathering powers, including right of entry and
phone-tapping.
 Also, contrary to common law, there is no protection
against self-incrimination for those who appear before a
Royal Commission.
 Royal Commissions are the public inquiry of ‘last resort’.
Being very expensive, they are usually used sparingly by
governments.
 The role of the Commission was not to resolve individual
complaints, yet to come to an understanding of the
systematic failures that may have led to the complaint
occurring.
 The RC adopted primarily a ‘case-study’ approach,
presenting in its public hearings specific cases of
misconduct and poor conduct from amongst the vast
number of submissions made to it.

31. CONCLUSION
 Hayne’s Royal Commission established clear signals
to re-orient the system towards the consumer; to do
the right thing; and ensure that the rules are clear,
followed, and enforced.
 This brought into existence check on misconduct in
the banking, superannuation, and financial services
industry.
 The commission does not pull punches but the sector
has been put on notice.
 The impacts of the findings is felt differently across
the economy, some big and some small.

32. CONCLUSION (CON’T)
o There is tangible evidence that the technology has
changed not only the way we communicate, but also
how businesses communicate.
o The traditional ways of reaching out to the market is
long gone; instead, customers and businesses interact
with each other every day through social media.
o Feedback is instant and data about consumer
preferences are faster than ever.
o It is up to the business to filter the relevant data and
make the most out of it in order to further enhance its
communication and improve its overall profitability.

33. CONCLUSION (CON’T)
o Also, as trust is the foundation of any healthy relationship,
o It must be embraced to be the guide of day to day operational
activities of an enterprise and avoid incidence of imminent
collapse.
 Do you take trust for granted?
 Do any of us really think about it at all until it’s been lost?

 Questions like these become even more difficult when we
transpose them into the workplace.
 Everybody wants to be treated with respect;
 everybody wants at least a modicum of freedom to do what is
expected of them in a way that suits them.

34. RECOMMENDATIONS
 Two or more small accounting firms can come together
to execute a large project making use of the great
technology at their disposal, but this can only happen
and be successful if there is trust among them and
their excesses can be checked using the stipulations of
Haynes commission.
 Remember that trust is an investment with one of the
best returns you will ever get.
 In any way, and as I used to warn my students of
Forensic Accounting: “Trust but verify”

35. Thank you for listening!